Implementing GENIUS: OCC Proposes Rules For Payment Stablecoin Issuers

Key Takeaways

• The OCC recently proposed its much-anticipated rules that would implement the GENIUS Act and establish a comprehensive federal licensing and prudential regulatory framework for payment stablecoin issuers subject to OCC jurisdiction.
• The Proposed Rules propose standards and requirements for payment stablecoin issuers relating to, among other areas, permitted activities, reserve asset composition, redemption timing, risk management (including private key management), custody, capital levels and periodic reporting. The OCC stated that they would address anti-money laundering and sanctions requirements in a separate rulemaking in coordination with the Treasury Department.
• The Proposed Rules also meaningfully extend a heavily-debated provision within the GENIUS Act that prohibits the direct payment of interest or yield by a payment stablecoin issuer to stablecoin holders. Importantly, the Proposed Rules would include an anti-circumvention provision that creates a